Yep, definitely confusing behavior. The reserved word still gets flagged even when double-escaped.
The reason is that Marketo recursively parses content as Velocity. So "disguising" the few VTL reserved words is difficult, maybe impossible (though I'll keep testing it). Eventually, the parser sees a literal #end.
In future, though I know it can be hard to coordinate this with the web team, avoid using reserved words in your hash: there are only a few (#if #else #elseif #end #set #foreach #define #macro #include #parse #break #stop #evaluate).
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